The allegations of fraud came from a 2013 audit for the state Human Services Department by Boston-based Public Consulting Group.

But Balderas clearing them came too late for some providers, who shut their doors after losing the Medicaid funding for behavioral health services.

The AG’s investigation found $1.16 million in overbilling between the 15 companies. The audit alleged $36 million in overbilling.

HSD has said it will continue to seek recouping the overbilled funds.

“It now falls to the Human Services Department to take timely and appropriate administrative action to resolve this regrettable situation to ensure that tens of thousands of vulnerable New Mexicans receive their critical services,” Balderas said at the time. “The department must find a way to fight fraud that does not put services to the most vulnerable at risk or result in hundreds of New Mexicans losing their jobs.”

Balderas also released the PCG audit, which former AG Gary King and HSD had kept from the public. Even providers who lost their funding said they never saw the audit that led to the allegations of fraud against them before the state cut off their Medicaid funding.

And more news came late in the year.

To fill the hole made by cutting off funding to the 15 New Mexico providers (some New Mexico organizations later resumed providing services), Arizona providers were brought in.

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The state House of Representatives approved a $7 billion budget on Thursday, sending to the Senate a plan for the next fiscal year that would provide nearly half a billion dollars in additional funds for public schools but which Republicans say amounts to an outsize increase in government spending. House Bill 2 would mark an 11 percent bump in New Mexico's budget, drawing on a surplus fueled by an oil and gas boom.

In April, five employees of the state agency that processes key federal benefits to the poor made explosive testimonies in court—that their bosses instructed them to doctor emergency food aid applications to hurt the very people they’re supposed to help. The following month, four more Human Services Department employees added their voices to the allegations.

Even in his final days of battling leukemia in early 2016, Jose Frietze was fighting for the youth services agency he founded in 1977. The state Human Services Department had accused the organization — Las Cruces-based Families and Youth Inc. — of potential Medicaid fraud and overbilling by $856,745 in 2013.

New Mexico legislators want the Department of Justice to look into the behavioral health shakeup from 2013 after the state Attorney General found no fraud. Senate President Pro Tem Mary Kay Papen of Las Cruces, Senate Majority Leader Michael Sanchez of Belen, House Minority Leader Brian Egolf of Albuquerque, all Democrats, sent the letter.

Even in his final days of battling leukemia in early 2016, Jose Frietze was fighting for the youth services agency he founded in 1977. The state Human Services Department had accused the organization — Las Cruces-based Families and Youth Inc. — of potential Medicaid fraud and overbilling by $856,745 in 2013.

Even in his final days of battling leukemia in early 2016, Jose Frietze was fighting for the youth services agency he founded in 1977. The state Human Services Department had accused the organization — Las Cruces-based Families and Youth Inc. — of potential Medicaid fraud and overbilling by $856,745 in 2013.

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The state House of Representatives approved a $7 billion budget on Thursday, sending to the Senate a plan for the next fiscal year that would provide nearly half a billion dollars in additional funds for public schools but which Republicans say amounts to an outsize increase in government spending.

Matthew Reichbach is the editor of the NM Political Report. The former founder and editor of the NM Telegram, Matthew was also a co-founder of New Mexico FBIHOP with his brother and one of the original hires at the groundbreaking website the New Mexico Independent. Matthew has covered events such as the Democratic National Convention and Netroots Nation and formerly published, “The Morning Word,” a daily political news summary for NM Telegram and the Santa Fe Reporter.
Matthew has appeared as a panelist for the Society of Professional Journalists’ New Mexico Chapter’s panel on covering New Mexico politics and the legislature.
A native New Mexican from Rio Rancho, Matthew’s family has been in New Mexico since the 1600s.